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Hili Tech Ltd has forecasted its total funds requirements for the coming year as shown in the table below: Given that short-term funds cost 5%
Hili Tech Ltd has forecasted its total funds requirements for the coming year as shown in the table below: Given that short-term funds cost 5% annually and that long-term funds cost 7% annually, calculate the total cost of each of the following strategies. Copy the above table and show all workings. Note: No marks will be awarded if there are no workings. (a) An aggressive funding strategy. (4 marks) (b) A conservative funding strategy. (2 marks) (c) Discuss TWO types of risk a firm may face in the use of aggressive funding strategy. (4 marks)
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